Hochul announces guidance to combat discrimination in affordable housing insurance

NEW YORK — Gov. Kathy Hochul recently announced new guidance informing insurers that they are prohibited from inquiring about or making coverage decisions based on a property’s status as an affordable housing development or on the level or source of a tenant’s income within the building, such as government assistance.

According to a press release, the guidance from the New York State Department of Financial Services follows legislation secured by Hochul as part of the FY 2025 Budget to prohibit discrimination in insurance based on tenants’ source of income or the existence of affordable dwelling units within the building.

“With this new guidance, we are putting insurers on notice: New York will not tolerate bias against our affordable housing providers,” Hochul said in the release. “Insurance discrimination drives up costs for property owners and renters and puts countless affordable homes at risk. My administration is stepping up our enforcement of housing discrimination of all kinds to ensure fairness in our housing market and to keep costs down for all New Yorkers.”

“This is a critical step to ensure that New York’s affordable housing providers are not discriminated against,” New York State Superintendent of Financial Services Adrienne A. Harris added. “I am incredibly proud of the work that this Department has done to address discrimination, in service of our mission to build a more equitable financial services system.”

“Tenants all over New York face barriers to housing based on their source of income, including Section 8 voucher status,” New York State Homes and Community Renewal Commissioner RuthAnne Visnauskas noted. “Stigma against Section 8 voucher recipients and tenants that live in affordable housing is discriminatory, whether it’s done by an insurance provider to set insurance rates or by a housing provider to exclude residents from housing accommodations.

“This law that the Governor championed will ensure that discrimination is not tolerated in NY, thereby creating avenues of access and affordability both for tenants and housing providers. This is another step toward ensuring our investments in affordable housing are not diminished by excessive insurance costs, allowing us to continue to provide housing opportunities for New Yorkers.”

Insurers are prohibited from inquiring about or considering, canceling, refusing to issue or renew, increasing the premium of, or excluding, limiting, restricting or reducing coverage based on:

• The presence of dwelling units in the building that are affordable to residents at a specific income level pursuant to a government agreement;

• The receipt of governmental rental assistance by the owner or tenants of a residential rental building, or the shareholders of a cooperative housing corporation;

• The level or source of income of the building’s residents; or

• Whether the building is owned by a limited equity cooperative, a public housing authority, or a cooperative housing corporation subject to certain provisions of the private housing finance law.

This legislation comes on the heels of a report published in November 2022 in which DFS, in conjunction with New York State Homes and Community Renewal, reviewed the practices of property/casualty insurance companies regarding buildings with affordable or subsidized housing units. In addition, the two agencies engaged with developers of affordable housing, who indicated they had experienced significant premium increases or difficulty obtaining policies for affordable housing developments.

For a copy of the Circular Letter visit https://www.dfs.ny.gov/industry-guidance/circular-letters/cl2024-06